BILL NUMBER: AB 1364	CHAPTERED  09/23/99

	CHAPTER   467
	FILED WITH SECRETARY OF STATE   SEPTEMBER 23, 1999
	APPROVED BY GOVERNOR   SEPTEMBER 23, 1999
	PASSED THE ASSEMBLY   AUGUST 26, 1999
	PASSED THE SENATE   AUGUST 23, 1999
	AMENDED IN SENATE   AUGUST 16, 1999

INTRODUCED BY   Assembly Member Migden

                        FEBRUARY 26, 1999

   An act to amend Sections 42002 and 42010 of, and to add and repeal
Sections 42023.1, 42023.2, 42023.3, 42023.4, 42023.5, and 42023.6
of, the Public Resources Code, relating to solid waste.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1364, Migden.  Recycling Market Development Loan Program.
   The existing California Integrated Waste Management Act of 1989,
which is administered by the California Integrated Waste Management
Board, establishes an integrated waste management program.  Under
existing law, a local governing body is authorized, either by
ordinance or resolution, upon the recommendation of the appropriate
land use planning agency, to propose eligible parcels of property
within its jurisdiction as a recycling market development zone.
Existing law creates the Recycling Market Development Revolving Loan
Subaccount in the Integrated Waste Management Account and
continuously appropriates the funds deposited in the subaccount to
the board for the purpose of providing loans for purposes of the
Recycling Market Development Revolving Loan Program.  Existing law
authorizes the board to make low-interest loans to local governing
bodies and private business entities within a recycling market
development zone from money in the subaccount for specified purposes,
and authorizes the board, upon appropriation by the Legislature in
the annual Budget Act, to expend money in the subaccount for the
administration of the recycling loan program.  Existing law prohibits
the term of any loan from exceeding 10 years, and prohibits the
board from financing more than 1/2 of the cost of a project, or
financing more than $1,000,000 for loans to the project, whichever is
less.  Existing law establishes specified requirements for those
loans.  Existing law authorizes the board to participate on a pilot
basis in the Capital Access Loan Program and authorizes the board to
participate in other state and federal lending programs that leverage
funds based upon the ongoing success of the pilot program.
   Existing law makes the provisions regarding the proposal for
market development zones, the creation of the subaccount, and
expenditures therefrom, inoperative on July 1, 2006, and repeals
those provisions as of January 1, 2007.
   This bill would reorganize and recast those provisions and in
doing so, would delete the repeal of the provision authorizing a
local government body to propose recycling market development zones
and the provision specifying that the board's participation in the
Capital Access Loan Program be on a pilot basis.  The bill would
authorize the board to operate both inside and outside the recycling
market development zones for purposes of participating in the Capital
Access Loan Program or in any other program that leverages
subaccount funds.
   This bill would instead prohibit the term of a loan from exceeding
10 years when collateralized by assets other than real estate, or
not more than 15 years when partially or wholly collateralized by
real estate.  The bill would prohibit the board from financing more
than 3/4 of the cost of each project, or from financing more than
$2,000,000 for each project, whichever is less.
   The bill would authorize the board to expend the money in the
subaccount to make loans to local governing bodies, private
businesses, and nonprofit entities within recycling market
development zones, or in areas outside zones where specified
partnerships exist with other public entities.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 42002 of the Public Resources Code is amended
to read:
   42002.  The following definitions govern the construction of this
chapter:
   (a) "Applicant" means a person, as defined in Section 40170, who
applies for designation as a Recycling Market Development Zone.
   (b) "Postconsumer waste material" means any product generated by a
business or a consumer which has served its intended end use, and
which has been separated from solid waste for the purposes of
collection, recycling, and disposal, and which does not include
secondary waste material.
   (c) "Recycling-based business" means any business that increases
market demand for, or adds value to, postconsumer waste material or
secondary waste material.
   (d) "Recycling market development zone" or "zone" means any single
or joint, contiguous parcels of property that, based on the
determination of the board, meets the following criteria:
   (1) The area has been zoned an appropriate land use for the
development of commercial, industrial, or manufacturing purposes.
   (2) The area is identified in the countywide or regional agency
integrated waste management plan as part of the market development
area.
   (3) The area is located in a city with an existing postconsumer
waste collection infrastructure.
   (4) The area may be used to establish commercial, manufacturing,
or industrial processes which would produce end products that consist
of not less than 50 percent recycled materials.
   (e) "Revolving loan program" means the Recycling Market
Development Revolving Loan Program established pursuant to Section
42023.1.
   (f) "Secondary waste material" means industrial byproducts which
would otherwise go to disposal facilities and wastes generated after
completion of a manufacturing process, but does not include
internally generated scrap commonly returned to industrial or
manufacturing processes, such as home scrap and mill broke.
   (g) "Subaccount" means the Recycling Market Development Revolving
Loan Subaccount created pursuant to subdivision (a) of Section
42023.1.
  SEC. 2.  Section 42010 of the Public Resources Code is amended to
read:
   42010.  (a) The local governing body may, either by ordinance or
resolution, upon the recommendation of the appropriate land use
planning agency, propose eligible parcels of property within its
jurisdiction as a recycling market development zone.
   (b) The proposal of a recycling market development zone shall be
based upon the following findings by the local governing body:
   (1) The current waste management practices and conditions are
favorable to the development of postconsumer waste material markets.

   (2) The designation as a recycling market development zone is
necessary to assist in attracting private sector recycling
investments to the area.
  SEC. 3.  Section 42023.1 is added to the Public Resources Code, to
read:
   42023.1.  (a) The Recycling Market Development Revolving Loan
Subaccount is hereby created in the account for the purpose of
providing loans for purposes of the Recycling Market Development
Revolving Loan Program established pursuant to this article.
   (b) Notwithstanding Section 13340 of the Government Code, the
funds deposited in the subaccount are hereby continuously
appropriated to the board without regard to fiscal year for making
loans pursuant to this article.
   (c) The board may expend interest earnings on funds in the
subaccount for administrative expenses incurred in carrying out the
Recycling Market Development Revolving Loan Program, upon the
appropriation of funds in the subaccount for that purpose in the
annual Budget Act.
   (d) The money from any loan repayments and fees, including, but
not limited to, principal and interest repayments, fees and points,
recovery of collection costs, income earned on any asset recovered
pursuant to a loan default, and funds collected through foreclosure
actions, shall be deposited in the subaccount.
   (e) All interest accruing on interest payments from loan
applicants shall be deposited in the subaccount.
   (f) The board may expend the money in the subaccount to make loans
to local governing bodies, private businesses, and nonprofit
entities within recycling market development zones, or in areas
outside zones where partnerships exist with other public entities to
assist local jurisdictions to comply with Section 40051.
   (g) The board shall establish and collect fees for applications
for loans authorized by this section.  The application fee shall be
set at a level that is sufficient to fund the board's cost of
processing applications for loans.  In addition, the board shall
establish a schedule of fees, or points, for loans which are entered
into by the board, to fund the board's administration of the
revolving loan program.
   (h) The board may expend money in the subaccount for the
administration of the Recycling Market Development Revolving Loan
Program, upon the appropriation of funds in the subaccount for that
purpose in the annual Budget Act.  In addition, the board may expend
money in the account to administer the revolving loan program, upon
the appropriation of funds in the subaccount for that purpose in the
annual Budget Act.  However, funding for the administration of the
revolving loan program from the account shall be provided only if
there are not sufficient funds in the subaccount to fully fund the
administration of the program.
   (i) The board, pursuant to subdivision (a) of Section 47901, may
set aside funds for the purposes of paying costs necessary to protect
the state's position as a lender-creditor.  These costs shall be
broadly construed to include, but not be limited to, foreclosure
expenses, auction fees, title searches, appraisals, real estate
brokerage fees, attorney fees, mortgage payments, insurance payments,
utility costs, repair costs, removal and storage costs for
repossessed equipment and inventory, and additional expenditures to
purchase a senior lien in foreclosure or bankruptcy proceedings.
   (j) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2006, and as of January 1, 2007, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2007, deletes or extends the dates on which it
becomes inoperative and is repealed.
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan.
  SEC. 4.  Section 42023.2 is added to the Public Resources Code, to
read:
   42023.2.  (a) Upon authorization by the Legislature in the annual
Budget Act, the Controller shall transfer a sum not to exceed five
million dollars ($5,000,000) from the account to the subaccount as
necessary to meet anticipated loan demand under the program.  Those
amounts shall be a loan to the subaccount, repayable with interest to
the account at the rate of return for money in the Surplus Money
Investment Fund.
   (b) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2006, and as of January 1, 2007, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2007, deletes or extends the dates on which it
becomes inoperative and is repealed.
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan.
  SEC. 5.  Section 42023.3 is added to the Public Resources Code, to
read:
   42023.3.  (a) All money remaining in the subaccount on July 1,
2006, and all money received as repayment and interest on loans
shall, as of July 1, 2006, be transferred to the account and any
money due and outstanding on loans as of July 1, 2006, shall be
repaid to the board and deposited by the board in the account until
paid in full, except that, upon authorization by the Legislature in
the annual Budget Act, interest earnings may be expended for
administrative costs associated with the collection of outstanding
loan accounts.
   (b) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2006, and as of January 1, 2007, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2007, deletes or extends the dates on which it
becomes inoperative and is repealed.
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan.
  SEC. 6.  Section 42023.4 is added to the Public Resources Code, to
read:
   42023.4.  (a) Loans made pursuant to Section 42023.1 shall be
subject to all of the following requirements:
   (1) The terms of any approved loan shall be specified in a loan
agreement between the borrower and the board.  The loan agreement
shall include a requirement that the failure to comply with the
agreement shall result in any remaining unpaid amount of the loan,
with accrued interest, being immediately due and payable.
Notwithstanding any term of the agreement, any recipient of a loan
that the board approves shall repay the principal amount, plus
interest on the basis of the rate of return for money in the Surplus
Money Investment Fund at the time of the loan commitment.  Except as
provided in subdivision (a) of Section 42023.3, all money received as
repayment and interest on loans made pursuant to this section shall
be deposited in the subaccount.
   (2) The term of any loan made pursuant to this section shall be
not more than 10 years when collateralized by assets other than real
estate, or not more than 15 years when partially or wholly
collateralized by real estate.
   (3) The board shall approve only those loan applications that
demonstrate the applicant's ability to repay the loan.  The highest
priority for funding shall be given to projects which demonstrate
that the project will increase market demand for recycling the
project's type of postconsumer waste material.
   (4) The board shall finance not more than three-fourths of the
cost of each project, or not more than two million dollars
($2,000,000) for each project, whichever is less.
   (5) The Department of Finance may audit the expenditure of the
proceeds of any loan made pursuant to Section 42023.1 and this
section.
   (b) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2006, and as of January 1, 2007, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2007, deletes or extends the dates on which it
becomes inoperative and is repealed.
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan.
  SEC. 7.  Section 42023.5 is added to the Public Resources Code, to
read:
   42023.5.  (a) The board shall, as part of the annual report to the
Legislature, pursuant to Section 40507, include, notwithstanding
Section 7550.5 of the Government Code, a report on the performance of
the Recycling Market Development Revolving Loan Program, including
the number and size of loans made, characteristics of loan
recipients, projected loan demand, and the cost of administering the
program.
   (b) This section shall become inoperative on July 1, 2006, and as
of January 1, 2007, is repealed, unless a later enacted statute,
which becomes effective on or before January 1, 2007, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 8.  Section 42023.6 is added to the Public Resources Code, to
read:
   42023.6.  (a) The board shall encourage applicants to seek
participation from private financial institutions or other public
agencies.  For purposes of enabling the board and local agencies to
comply with Sections 40051 and 41780, the board may participate, in
an amount not to exceed five hundred thousand dollars ($500,000), in
the Capital Access Loan Program as provided in Article 8 (commencing
with Section 44559) of Chapter 1 of Division 27 of the Health and
Safety Code.
   (b) For purposes of participating in the Capital Access Loan
Program, as specified in subdivision (a), or in any program that
leverages subaccount funds, the board may operate both inside and
outside the recycling market development zones.
   (c) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2006, and as of January 1, 2007, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2007, deletes or extends the dates on which it
becomes inoperative and is repealed.
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan.
